The Investment Company Institute (ICI) commended the Securities and Exchange Commission (SEC) plans to allow dual share class funds.
The SEC granted approval to Dimensional Fund Advisors to offer ETFs as share classes of mutual funds.
“We applaud the SEC’s indication of its intent to grant exemptive relief to allow asset managers to offer mutual funds and ETFs as separate share classes under the same portfolio. This decision is an important step to expanding investor choice and fostering a more competitive marketplace,” Eric Pan, ICI president and CEO, said. “ICI previously called on the SEC to prioritize approval of such exemptive relief, and we have been working closely with our members, intermediaries, service providers, and other key stakeholders to prepare the industry for this moment. ICI will work close with the industry in implementing the soon-to-be granted relief of this first application and the nearly 80 remaining applications.”
In a March white paper, “Reimagining the 1940 Act,” ICI encouraged the SEC to enable new or existing funds to offer both mutual fund and ETF share classes. Allowing a single fund to offer both mutual fund and ETF share classes would promote efficiency and economies of scale and provide more options for investors, ICI argued.
“Today, the Commission takes a long-overdue step toward modernizing our regulatory framework for investment companies that reflects the evolution of collective investment vehicles from being primarily daily redeemable funds to exchange-traded funds (ETFs),” SEC Commissioner Mark Uyeda said.